AdWords Arbitrage Getting Harder

In a post earlier this year, I briefly mentioned AdWords arbitrage (a.k.a. AdSense arbitrage) as part of a discussion on driving traffic to a site via the AdWords program. A lot has been written about taking advantage of Google's system, but there was recently a particularly interesting piece on Forbes.com.

"Two years ago, Schoemaker says he was living on unemployment checks. Since then, he says he's made more than $2 million by arbitraging search terms related to cell phone ringtones, teeth whitening and mortgages. He estimates that around 50 people are earning more than $1 million a year from AdWords arbitrage, some making several million a month."

Regardless of what you think about arbitrageurs, you have to admit that there is some serious cash to be earned. You may even be wondering if you can jump on the bandwagon, but my guess is the ship has sailed. If you're not already in the game, you're unlikely to be able to have it as easy as folks did a couple of years ago. Here's why:

"So Google has revised its page-ranking algorithm, the spider that constantly probes and indexes the entire Web, to give pages a quality score based on whether they appear to be content-less advertising pages or to have legitimate value. Pages with low quality scores are flagged by the spider and often must pay hundreds of times more for the same AdWords in Google's auctions."

So you'll not only have to find niches to bid on, but you'll have to deal with Google's attacks against your attempts. One clue to how to beat Google is given in the article. It involves using cloaking which, if done correctly, shows Google's spiders legitimate looking content while showing regular users ad-filled pages. Be warned that cloaking, if detected, will get you banned from Google's search engine index.